Combining wheat© Tim Scrivener

Fertiliser prices are likely to stay under pressure in the next few weeks.

Hand-to-mouth buying and ample supplies mean most fertilisers cost less than they did in February.
With the impact of greening, spring cropping and cashflow pressure difficult to gauge, traders are unsure of the size of the market and this is also weighing on prices – sellers do not want to be left holding stock at the end of May.

The UK uses about 2.2m tonnes of nitrogen a year but trade estimates for this year vary from just 1.9-2m tonnes.

With ex-farm grain sales also having been well behind the seasonal norm for much of the time since harvest, cashflow has been an issue for arable as well as for dairy, beef and sheep producers.  

From a logistics perspective, the relatively kind winter and spring have allowed deliveries to take place without the degree of squeeze feared by many earlier in the season. This in turn has added to the price pressure.

 

Nidera’s fertiliser manager Richard Monck estimated there was at least 10% of the nitrogen market left to do be booked in the east of England.

Chris Haydock, fertiliser and seed business manager at Anglia Farmers, said: “Imported AN, potash and phosphates have reduced slightly as importers and blenders look to move product on to farm and reduce expensive storage costs at the ports.

Fertiliser update – April 2015 (£/t delivered)*

UK 34.5%N

Granular urea (46%)

Imported AN (Lithan)

20.10.10

£280-290

£275-280

£260-265

£270-275

Potash (MOP)

Phosphate (DAP)

Phosphate (TSP)

 

£262-265

£390-395

£298-305

 

*All illustrated prices are based on full loads for cash payment month following

“Therefore there are deals to be had for delivery on to farm in the next few weeks.”

Imported offers put Polish ammonium nitrate at a £3-£5/t discount to Lithuanian product.

At Gleadell Agriculture, fertiliser manager Calum Findlay said urea prices were at a five-year low, in US dollar terms at least.
The relative strengthening of the dollar against the pound over the past year means that sterling values delivered to farm in April for granular urea range from £275-£280/t, although these are £5-£8/t down on a couple of weeks ago.

On a cost per kilogramme of nitrogen basis, this puts it well below both imported and UK manufactured ammonium nitrate, which are going on to farm in April at £255-£265/t and £284-£290/t respectively.

“On the global market, offers suggest prices could ease, but there is significant potential demand looming from India, Pakistan and Egypt,” said Mr Findlay.

Some traders think livestock producers will apply nitrogen only to save cash, but point out this could restrict how much quality home-grown forage can be produced.  

Traders are unwilling to speculate on new season prices but expect ammonium nitrate prices to be out before the Cereals event, led by early urea offers.

A large Indian fertiliser tender was due to close on 10 April and this would set an early benchmark for urea prices for next season, said Mr Monck.